Kfc Makes Re-entry Into S. Africa Market

June 21, 1994|By Bloomberg Business News.

JOHANNESBURG — PepsiCo Inc. said Monday its Kentucky Fried Chicken business is investing in South Africa again after a seven-year absence, by purchasing South African holding company Devco for an undisclosed sum.

KFC also will pour $192.4 million into South Africa over the next three years to build another 200 restaurants throughout the country. The new units are in addition to 300 already operating. KFC also said it plans to open its first restaurant in neighboring Zimbabwe by the end of the year.

The latest announcement is the second by a PepsiCo unit in the last three weeks, as Pepsi-Cola International Inc. said it plans to return to South Africa following a nine-year hiatus. The company said it will take a 25 percent stake in a joint venture that will invest $100 million during the next three years to build a South African bottling plant.

Taco Bell, another unit of PepsiCo, said it had no plans to expand into South Africa.

She said the Mexican fast-food chain is looking to expand further into Latin America and Canada, among other places.

KFC left South Africa in 1987 to comply with U.S. sanctions against the country's apartheid government. The Clinton administration removed the last of those sanctions in November. South Africa held its first multiracial elections in April.

Devco had administered the KFC trademark for the last seven years, which represented more than 30 percent of South Africa's fast-food restaurant market, PepsiCo said.